What to do when markets are volatile?

How are you feeling?

With the backdrop of the increased volatility in the markets, it can be
unnerving to be seeing your portfolio too frequently. There is going to be
a US-china talks held on the 21-22nd Aug in the United States, to speak on
the tariffs.

Not much might change, as both sides are still going strong with their
views but it seems that both countries eventually want to achieve a win
win situation.

It is also time to bring you back to the
fundamentals of investing.

1) Time is your friend
Speculators who have short time horizons will be very fearful at this point because of uncertainty. Long term investors will be happy because it
can be good time to buy in when markets are discounted right now. You get
to buy more when markets are cheaper.

2) Stick to your original objectives
Do not shift your long goals just because markets have shifted in value.
In fact, any downward shift is good for long term investors.

3) Do not let emotions take over.
Back in 2008, there was extreme fear in the markets especially when
markets collapsed unexpectedly. However, if a person stayed the course
of investing and topped up, he would have emerged much better off today
than 10years ago.

4) diversify
In volatile markets, single companies could collapse and never recover. In a portfolio of diversified investments, continuing to buy in a downtrend market is fine.

A 100% equity allocation like China would have dropped by about 25% by
now, but because we are widely diversified in a portfolio, we are still
affected, but slightly affected, down in the range of 5-6%.

In short, what should you do now?
a) Stay calm and relax, drink your coffee.
b) Stay invested and TOP-UP if you have extra money meant for the long
term now.
c) Continue to rebalance regularly.